Comments on: SEP IRA Contribution Limits (2010 & 2011)

By: sep ira maximum contribution student

sep ira maximum contribution student — Sun, 31 Oct 2010 18:31:02 +0000

With SEP IRA maximum contribution limits so high I can quickly build up a retirement nest egg.

By: George Fellner

George Fellner — Tue, 19 Oct 2010 14:24:40 +0000

I was in college at Georgetown with John Bongiovanni class of ’56. Are you related?

By: Nate

Nate — Tue, 28 Sep 2010 16:07:00 +0000

An old post, I know, but this advice is not completely accurate (or at least not fully disclosed).

A SEP participant is considered “covered by an employer sponsored plan” and will be reflected as such on his/her W-2. Depending upon filing status and modified AGI, IRA contributions may or may not be deductible. Although one could technically still make a contribution even if it’s not deductible, it is rare that you actually should, in that case. There are almost certainly better options that provide similar or better tax breaks (e.g. fixed annuities and Roth IRAs). As a rule of thumb, anyone that is seriously concerned about the $49k cap almost assuredly makes too much money to qualify for the IRA deduction.

All that aside, IRA contributions are limited to $5,000 in 2010 plus a catch-up contribution for those older taxpayers that qualify. $49k is only the maximum for certain employer sponsored plans.

By: FREDERICK BONGIOVANNI

FREDERICK BONGIOVANNI — Tue, 13 Apr 2010 18:17:09 +0000

IF A PARTNER CONTRIBUTES $ 22000 TO A PARTNERSHIP 401K
(WHICH INCLUDES $ 5500 CATCH UP) CAN HE ALSO CONTRIBUTE TO
A SEP (UP TO THE MAX.) HE HAS INCOME FROM THE PARTNERSHIP IN EXCESS OF 200,000/

By: DR

DR — Sat, 27 Feb 2010 21:50:11 +0000

Charles, let me first say that I am NOT a tax expert, so you’ll need to consult a tax professional. That said, I’m pretty sure you can contribute to both up to the maximum ($49k I think).

By: Charles Schubert

Charles Schubert — Sat, 27 Feb 2010 21:43:57 +0000

I have found nothing on the web or at the IRS site that says whether a sole proprietor can contribute to both a SEP IRA and an individual IRA? I have an individual as a result of plan roll overs from traditional employment. I have continued to contribute to that but it seems with my consulting a SEP would be/have been smarter. Since I already did my 2009 Traditional can I also do a SEP?

By: kk

kk — Mon, 14 Dec 2009 17:25:28 +0000

hi Patrick,

I am in a situation that you described above. Can I please call you to discuss my case with you. I am a self employed and have a SEP-IRA currently. I need to know how to contribute maximum $49000/

By: Patrick

Patrick — Sat, 24 Oct 2009 05:59:20 +0000

I ended up going with a Solo 401k, which was the best for my situation at the time. The aspect of the Solo 401k that I like is that I can contribute for my wife, who no longer works a day job. So I have her on the payroll and her salary can be used to fund her 401k. So not only is she earning for retirement, but she is also still contributing toward social security and earning those credits.

Another benefit of going with the Solo 401k is that you can contribute up to the $16,500 max, then contribute profit sharing to work toward your $49,000 limit. That allows some people to contribute more than they would otherwise be able to contribute with a SEP IRA because they can contribute the $16,500 baseline first, then contribute more. It’s a moot point though if your business is profitable enough to cover the $49k.

That’s the great thing about self-employed retirement accounts – there are many options and you can usually find a plan that will meet your needs.